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Monday, July 25, 2011

A Real Stimulus: Restore Gulf Energy Production

A report mentioned in an article from Forbes, and copied in other blogs, boasts that by returning to pre-BP oil spill production in the Gulf would create an almost immediate 230,000 jobs.
In a report on the effects of the Obama Administration’s continuing non-moratorium on drilling in the Gulf of Mexico, energy consultancy IHS-CERA revealed today its findings that returning oil and gas activity to the pace that it was on before the BP oil spill would result in the creation of 230,000 new jobs in 2012 and add $44 billion to the U.S. economy.
The effect would be felt far from the Gulf coast states — with manufacturing centers like Pennsylvania and Ohio enjoying more business. Additionally, IHS-CERA determined that a return to activity levels would generate $22 billion in direct wages, unlock $19 billion a year in pent-up capital investment, and create $6 billion a year in royalties and tax payments.
Then there’s the impact of what all this labor and investment would ultimately produce — an additional 150 million barrels per year of oil from the deepwater Gulf of Mexico alone.
That’s more than twice the amount that the administration agreed to release from the Strategic Petroleum Reserve, and which the administration will eventually need to repurchase from the market and return to the strategic petroleum reserve.
That’s enough oil to replace half of the shut in volumes from Libya. And enough (at an average $100/bbl) to offset $15 billion a year in oil that we have to buy from the rest of the world.
Setting the record straight on the administration’s insistence that the new Bureau of Ocean Energy Management is getting oil and gas operators back to work in the Gulf, IHS-CERA looked at the pace of permitting in the six months since the moratorium was officially “lifted.” They found that relative to activity before the spill, there’s been an 86% plunge in plans approved by regulators, a 38% increase in the time taken for the plans that did get through to be approved, and a 60% drop in the number of drilling permits issued.
Smarter regulation doesn’t need to be slower regulation. While we’re waiting for the green energy revolution to start generating those long promised jobs, is there really any excuse not to bolster our fortunes with a little bit of conventional energy?


Alright, Biden, what was the Coordinator in Chief's three letter word to help the economy? J-O-B-S.

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